June 4 (Bloomberg) -- The European Union plans to change
the approval process for growing genetically modified crops in
the 27-nation grouping, easing a system that blocked all but one
application in more than a decade.

The proposal by Health and Consumer Affairs Commissioner
John Dalli may be announced July 13, commission spokesman Roger
Waite said by phone from Brussels today. It would allow member
states to opt out of cultivating approved crops, he said.

The EU’s approval process has hindered companies including
Germany’s BASF SE and U.S.-based Monsanto Co. from expanding the
European market for biotech crops. The commission in March
approved a modified potato developed by BASF, the first such
move in a decade, after an approval process that began in 2003.

“You could be looking at a fairly significant increase in
crop yields in five to 10 years,” Laurence Alexander, an
analyst at Jefferies & Co. in New York, said by phone.

The commission said March 2 it planned to come up with a
proposal “by the summer” that would allow EU members more
choice on whether to allow growing of genetically modified
crops. Waite said governments have been “dragging their feet”
under current rules to delay approvals.

“Our hope is that this might accelerate the approval
procedure for GMOs for cultivation,” Waite said. “All
authorization will still take place on a European-wide basis. A
member can then choose for this opt-out clause.”

Animal Feed

The proposals only cover growing biotech crops, not their
use in food and animal feed, according to Waite.

Biotech foods range from corn to oilseeds whose genetic
material has been altered to add beneficial traits such as
resistance to herbicides or toxicity to insects. Since ending a
six-year moratorium on new gene-modified products in 2004, the
EU has let them be imported for food and feed uses.

The EU approved only two genetically modified crops for
cultivation, compared with about 150 being planted worldwide,
Jefferies’ Alexander said in a report today.

EU biotech plantings fell 12 percent to 94,750 hectares
last year as Germany abandoned insect-resistant corn, the
International Service for the Acquisition of Agri-Biotech
Applications said in a report in February. Six EU nations
planted engineered corn, with Spain accounting for 80 percent of
the region’s total, the industry group said.

“We view this as incrementally positive for Monsanto and,
to a lesser extent, DuPont, but we note that the proposal could
lead to years of wrangling within the EU without a clear-cut
resolution,” Alexander wrote in the report.